Like so many peers, expected provisions for credit impairments rose strongly in the second quarter and the year so far. Within the Canadian bank's wealth arm, however, results were stronger than a year ago.

The wealth management arm of Toronto-listed BMO Financial Group today reported net income of C$341 million ($258 million) in the three months to July 31, rising by 37 per cent on a year earlier.

BMO’s Traditional Wealth business reported net income of C$271 million, an increase of 20 per cent, and adjusted net income was C$279 million, rising by 19 per cent, primarily driven by lower expenses and higher revenue, partially offset by higher provisions for credit losses. 

For the group as a whole, it logged net income of C$1.232 billion, down from C$1.557 billion a year earlier. Revenues rose to C$1.718 billion from C$6.666 billion. Total provision for credit losses rose sharply to C$1.054 billion from C$306 million, reflecting expected rising problems stemming from the global pandemic. For the year to date, credit loss provisions were C$2,521 billion, compared with C$619 million a year earlier.

The Canadian bank had a Common Equity Tier 1 ratio – a common international measure of capital buffer – of 11.6 per cent.